How Reliable Are 360 Degree Performance Appraisals?

Performance appraisals need to hit their mark especially when they are used to determine which employees receive promotions and which ones are shown the door. In terms of reliability, 360 degree performance appraisals are supposed to provide the best reflection of an employee's work, but do they?

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A Reality Check on the Reliability of 360 Degree Performance Appraisals

The 360 degree performance appraisal has quickly established a reputation for its effective use as an HR tool for not only evaluating an employee's past performance but also predicting a worker's future success. But is this appraisal no better than a Magic 8-Ball for foretelling whether a worker will continue to be a valuable asset to the team? The reliability of 360 degree evaluation is based on the premise that with more information from more sources you get a better read on employees' current abilities and their readiness to assume greater responsibilities and to advance to the next level. But this is only true if the information and the sources are reliable themselves.

In an ideal work setting, you want employees and employers to be able to give honest and constructive praise and criticism so that you can use the 360 degree review to make important human resource decisions, including promotions, bonuses, professional development and skills training, and terminations. An appraiser's willingness and ability to give a complete and honest evaluation directly affects the reliability of the 360 performance appraisal. However, a number of factors can undermine the willingness and the ability of participants to be forthcoming with a thoughtful but brutally honest evaluation. First, there is a strong desire not to rock the boat by being too critical of the people we work with on a daily basis. In other words, we want to continue to keep our friends close and our foes from retaliating against us for giving a subpar evaluation. Fear is not the only factor that stands in the way of providing good feedback. A lack of knowledge regarding the job requirements of the person being evaluated impairs the ability of others to give complete and relevant feedback. You can't critique what you don't understand.

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Ways to Improve 360 Degree Performance Appraisals

The reliability of 360 degree performance appraisals can be improved substantially by redesigning the process to minimize biases and to encourage participants to provide frank responses about themselves and others. Also, you can increase the relevancy of the feedback, which in turn improves reliability, by restructuring how people interact, particularly in groups. Here are a few suggestions in creating a better appraisal system.

2. Increase the Frequency of the Evaluations – This method will help in two respects. First, it will give the appraisers more opportunities to observe the performance of individuals and eliminate first impression or single event biases. Second, it gives evaluators more practice with the 360 degree evaluation process. While the dreaded annual evaluation could still become the dreaded six or four month evaluation, more familiarity with the process will eventually help to improve the quality of the feedback.

3. Garner Support from Top Management – Top management needs to create a culture through communication and incentives to reward honest constructive feedback while discouraging candy-coated evaluations. Ironically, in order to boost the reliability of 360 degree performance appraisals, management needs to communicate and demonstrate first that they are going to treat the performance appraisal as a reliable indicator.

4. Initiate Cross-training or Job Rotation – It is difficult to evaluate a co-worker when you don't fully have an appreciation the scope of what they do. Crossing-training and job rotation will assist everyone to better understanding various job functions.

5. Promote Team Projects - Get people out of their cubicles and into the meeting room to collaborate on projects. Group projects are an excellent way to hone existing technical skills and to explore and develop new skills. Also, observing a team leader is a great way to preview an employee's leadership style before they are assigned larger and more complex responsibilities. While team projects can certainly help improve the quality of 360 degree evaluations, interestingly, the reverse may also be true in that 360 degree evaluations may help to improve project team performance.

Tips for Writing Performance Appraisals

This series covers the dreaded performance appraisal – loathed by employees and managers alike. Learn how you can make the performance appraisal process more effective, and also find alternatives to what many consider “a broken system."